A professor in Macau public administration believes the ongoing suppression of gross gaming revenues in the SAR is not necessarily due to COVID-19 restrictions but more closely linked to mainland China’s anti-gambling measures.
Speaking with Inside Asian Gaming after the Gaming Inspection and Coordination Bureau (DICJ) reported GGR of just MOP$2.19 billion (US$271 million) in August – the second lowest monthly figure of the year – Eilo YU Wing-yat said there were greater forces at play than the pandemic.
“From [China’s] point of view, the central government does not want too many mainlanders coming to Macau or other places for offshore gambling.,” he said.
“70% of visitors to Macau used to be mainland residents, but now only 10% [of those mainland visitors] are left. The pandemic is only accelerating the decline of the gambling industry but the root cause is the mainland’s restrictions on offshore gambling.”
Macau remained open to mainland China between January and late June, but GGR for the first half of the year reached only MOP$26.3 billion, down 46.4% year-on-year.
Perhaps in an effort to boost foreign visitation, the Macau government this week permitted entry for foreigners from 41 countries, albeit with a mandatory seven-day hotel quarantine measure still in place for all foreign arrivals. Eilo YU said even if Macau resumes normal interaction with foreign countries next year, it will not return to 2019 GGR levels.
He pointed out that, “The Macau gaming industry, to develop foreign sources of customers, will not be able to do so in a short time, and even if clearance is given GGR will not return to 2019 levels.”
In the new gaming license tender in Macau, the government has also added the condition of “developing foreign markets” to the tender, with the bidders asked to introduce initiatives designed to attract “foreign” customers, that is customers from outside greater China. The government has said that Macau’s gaming industry can no longer rely on “a single source of tourists.”
The government also estimated the annual gambling revenue at MOP$130 billion for the past two years. Will the government make such an estimate next year? Eilo Yu said, “I don’t have a crystal ball, so I can’t predict how much the gambling revenue will be next year … but of the MOP$130 billion gambling revenue estimated, 40% (MOP$52 billion) will be included in the government’s gambling tax revenue, and together with other government revenues, total government revenue is expected to reach about MOP$70 billion to MOP$90 billion.
The government’s recurrent expenditure, not counting infrastructure projects and other non-recurring benefits, will be between MOP$60 billion and MOP$80 billion, so the MOP$130 billion gambling revenue budget would maintain the fiscal policy of keeping expenditure within the limits of revenues.”